Transcript Pricing
Pricing TV and Radio Costing out Media How do you figure out what it costs to purchase media? Direct Mail Take Phoenix Media Facts sheet Every time Drop is made, determine # you want to make-Example. If you want to drop 3500, multiply 3500 times .62 cents per piece= $2170 every time you drop. If you choose to drop 10,000, the price drops to .53 cents per piece or $5300 for 10,000. You can count on a 2-3% return on investment, so if you drop 10,000 pieces, Homevestors would receive between 200-300 calls based on history. (That comes out to around $30.00 per call which isn’t bad.) We don’t work with cpp’s on Direct Mail Costing out Media Outdoor Outdoor can be sold by fixed and preemptable positions. Fixed means you purchase exact locations for an exact period of time (possible to have extra time if board is not sold) Pre-emptable means you purchase distress inventory, you don’t necessarily get to pick many of your locations although you can negotiate areas. Other advertisers can come in even after you purchase this and pre-empt you. You only pay for what you run. Costing out Media Outdoor Homevestors uses 100% pre-emptable outdoor boards, Means that they might say to the outdoor company, give me 80 30 sheets June-Sept. Because they are preemptable, they might only get 65 of them, but they pay about .50 on the dollar or less. So, you might budget for 80 at $500 per board per month (+ 28.00 for paper per month) but you would only be charged for 65 boards. Homevestors buys up distressed inventory which means that they take what’s left over, but only pay half of what everyone else does. Also, because the outdoor co. may not sell the inventory when their contract is up, they would get additional time at no charge. Costing out Media Outdoor Showings equate to GRP’s. If you decide to purchase 40 30-sheets on a pre-emptable basis, the cost would be (40 x 500+28)= $21,120 per month. This would deliver a 25 showing or 25 GRP’s/wk or 100 GRP’s month CPP would be 21120/100 or $211.20 per point meaning it costs $211.20 to reach 1% of the target audience. In-Class exercise for Outdoor Costing out Media Yellow Pages Known is that you will run every month with a dollar billed size Ad in Phoenix/Prescott Yellow Pages for $1600 per month and Phoenix/Prescott White Pages for $175 per month. Total cost $1775 per month. This is purchased for the year. Costing out Media Sold by column inch Display ad: SAU (standard advertising unit) Line-rate (or agate rate) for classified ads Open-rate/Flat rate (color rate) Color charges are “add-on” Different rates for national, retail, classified, co-op Geographic rate Frequency/volume discount Costing out Media Readers-per copy The total number of primary and pass-along readers of a given issue of a publication As a copy is passed from one reader to the next, the number of readers of that copy increases ie readers-per -copy Costing out Media Factors affecting Readers-per copy Distribution patterns-airplanes, doctors’ offices, etc allow more people to be exposed to a specific copy…much of this readership is passalong Amount of Editorial…The more words contained in a magazine, the longer it takes to read. Primary readers will hold that copy longer with fewer passalong readers Type of editorial…Some pubs are retained by primary reader because of the reference material Costing out Media Readers-per-copy (RPC) is determined by dividing total audience of an average issue (as reported by various research companies) by the average issue circulation of that pub Not necessarily an accurate number, but is commonly used by planners to assess total audience of a pub or to plan for a new publication Costing out Media Total audience =2,300,000 Average issue circulation =1,800,000 RPC=2,300,000/1,800,000=1.27 readers per copy Costing out Media For Newspaper (Classified) You select the line rate for the day you want Determine how many column inches you want Each Column inch is 14 lines. Multiply the line rate times 14 times the # column inches you and that is your rate for one day Costing out Media Example: You want to purchase 2 column inches on Thursdays paper. Rate for each line on Thursday is $35. Multiply 14 x 2 (14 lines x 2 column inches) and multiply that times $35. That is your daily rate for the classified ad.$980 Costing out Media Radio-For Radio and Television, you’re going to assume that schedule can be purchased for 80% of what the listed costs are (good negotiations by media buyers) You decide you want to purchase 40 TRP’s or Early Morning per week, 40 TRP’s of PM Drive per week every week for 2nd and every other week for 3rd quarters (13 weeks) 2nd quarter AM Drive is 205 per point and PM drive is 257 per point=$18480 per week would deliver 80 GRP’s. This equates to 320 GRP’s/month for $73920 ($231 cpp) 1040 GRP’s for $240,240 Costing out Media Radio For third quarter, you want to purchase 40 trp’s of AM Drive every other week and 40 TRP’s of PM drive every other week. Cpp for AM Drive in 3rd quarter is $202. CPP for PM Drive is $240 $442 x 40 GRP’s =$17,680 week for 80 GRP’s. Lets say you buy this for 6 of the 13 weeks. This is $ 106,180 for 480 GRP’s Total for entire radio would be $240,240 + $106,180=$346,420 and 1040 + 480 =1520 GRP’s. But don’t forget that you have great media buyers that can negotiate this for 80% of rate card, so multiply you cost by .80 =$271,136 Costing out Media Television Look at SQAD data. SQAD stands for Standard Quotations and Data and is based on advertising agencies all over the world that subscribe to the service. There are generally 3 different levels of SQAD, Low which means it is being purchased at least 13 weeks out (long term purchase. Medium which means there is about 6 weeks lead time and High which means client has to get on the air immediately and you are buying when there is no inventory available and you have to go in and preempt other advertisers, so you are paying a higher price. Costing out Media Television You decide that you want to purchase 30 GRP’s of Early Morning and 20 GRP’s of Day time in First and 2rd quarter for 6 weeks each quarter. In 1st quarter, EM costs 237 per point and Day costs 267 per point. 237 x 30 grp’s x 6 weeks =$42,660. 267 x 20 grp’s x 6 weeks =$32040 So, 300 (50 x 6) GRP’s in 1st quarter will cost $74700 Costing out Media In 2nd Qtr, Early morning costs $273 per point and Day costs $308 per point So, 237 x 30 grp’s x 6 weeks =$42,660 $308 x 20 GRP’s x 6 weeks =$36,960 2nd quarter ttl =300 grp’s/$79620 1st Qtr + 2nd Qtr =$74700 +$79620 =$154,320…but your great media buyers can buy this for 80% of rate card, so $154,320 x .80 =$123,456 for 600 grp/s.